Bulk Vending

Bulk Vending is the sale of nuts, gumballs, toys and novelties. Sold in bulk thru a non electrical machine.

History

Bulk vending dates back to the late nineteenth century. Vending machines were widely used in Europe before they made it to the United States.

The first known vender was placed in London in the early 1880's and was a postcard machine. The first machines in the United States were placed in New York City. They sold Tutti Frutti gum in the subways.

In 1897 the Pulver Manufacturing Company added animated figures to it's gumball machines. The round coated gumball was introduced in 1907. The hard shell has made this a stable for the bulk vender ever since.

The Northwestern Novelty Company was formed in 1909. Northwestern Vending Machines manufactured and sold the Yankee machine. This was a penny matchstick machine.

In 1913 the Ford Gum and Machine Company was founded. It became an empire in the gum vending machine business. At the company's peak they had over 500,000 machines on location.

Oak Vending Machines Manufacturing is one of the leading companies making bulk venders. The company opened its doors in 1948 and is still manufacturing machines today.

As you might guess anything making money would attract the attention of the United States Treasury Department. In 1950 it imposed a gambling excise tax on the vendors. The Treasury Dept claimed it was a form of gambling because the customer never new what they were going to receive.

The National Bulk Vendors Association (NBVA) was formed and was successful in lobbying against the tax. The NBVA in more recent years joined with the coin coalition. Although they were unable to eliminate the dollar bill they were able to push the dollar coin through.

Vendors like the dollar coin over the dollar bill because of the dependability of the coin changer versus the bill acceptor.

From The Customer's Perspective

The operation of the bulk vender is pretty straight forward. The customer inserts a coin into the machine. She then turns a mechanical knob or pushes a lever. This in turn dispenses the product.

It is hard to impossible for the customer to see what is going to come out. For this reason bulk machines are a great item to sell collectibles that come in a series.

To get the complete set a person always ends up with multiples trying to get the last item in the series.


From The Vendor's Perspective

Bulk vending is very much a hands on operation. It is much like any other business opportunity. You must be able to keep good records of your sales. You of course will have to keep records for income taxes.

Liability insurance is also an item that the operator must have. It can be hard to find an insurance company that will insure you.

You will need to be a sales person or be willing to hire vending locators to place your equipment. Proper placement is essential.

Bulk Candy Vending Machine Advantages

The advantage of this business is that in many cases it can be started as a home based business.

The product in most cases has a high profit margin. It is possible to buy gumballs for two or three cents a unit. Then turn around and sell them for twenty five cent a unit.

The bulk vending machine is simple in nature. They are usually gravity fed. They are normally powered by a mechanical handle which is turned by the customer.

In many states this business is exempt from sales tax. Many people find that bulk vending business opportunities are a good place to start into the vending business. The reason is that most of your customers are open on weekends and at night. This makes it possible to hold down a full time job while starting your vending company.

The Disadvantages Of This Form Of Vending

Some of the disadvantages are that machines which are located near the entrance/exit can be easily stolen. A retailer will at times kick a company out when their competition offers them a larger commission.

A good way to gain a retailer's loyalty is to make a donation to a charity. This makes for good customer publicity and can help hold down the commission rate.

The cost of liability insurance can be hard on a start up company with a small number of machines on location.

Another problem is when a host location goes out of business. A percent of the time the machines are left behind in a location. They may be confiscated by a lender that is owed thinking the retailer owned them.

Vending Machine Manufacturers

There are two major suppliers of machines. Northwestern Corporation (established in 1909) and Oak Manufacturing ( established in 1948). These two companies are known for building high quality machines.

I think you would be happy with either brand. Most vendors will get started with one brand and remain loyal to that company.

The Full Time Vendor

Most companies are started as a sideline to a full time job. As more accounts are placed some will decide to leave the job and go into vending full time. These companies are normally one person operations with the owner enjoying their freedom from the 9:00 to 5:00 workplace.

When they move to full time the need for placing new vending locations becomes imperative With more good locations some turn into multiple employee companies. The bulk vending company is normally not as large as a full line vendor but does enjoy advantages over the snack/soda vending company.



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